Risks from the Current Senior Housing Boom

An article at National Real Estate Investor recently took another look at the boom in the senior housing industry, which anticipates a major influx in demand in the next 10 years, as large numbers of baby boomers begin to require senior rehabilitation or the comfort and safety of senior housing facilities.

The article expresses some concern about the possible consequences of the boom, which appears to be leading inexperienced developers to begin senior housing projects. Of course, the article is written from the perspective of real estate investors and is focused on the fact that some of those senior housing and senior rehabilitation facilities are likely to fail, especially if supply outpaces demand.

But there are human consequences behind financial ones, and it is worth considering that if new senior housing facilities fail, that failure would likely be preceded by financial shortfalls leading to poor quality of care and service for the last residents.

The article’s warning to investors is based on national statistics, and we haven’t seen recent local statistics, so it is currently unclear how much of a danger these trends are to senior housing facilities in Colorado. Still, this state is no different from the others in terms of the expected volume of retirees, so conscientious seniors and their families would be well advised to watch the trends in the senior housing industry.

In previous blog posts, we’ve talked about the current boom, and we remain convinced that the rise in competition is a net positive for senior housing and senior rehabilitation. But there are risks, as well, so prospective residents must do their research before committing to any residence. Wherever possible, seniors in this area would be well served to stick to a Colorado senior housing facility that has a proven track record, especially if it has responded positively to the climate of competition by further boosting its already high levels of care.